Key Points: When it comes to the consumer, market participants spend a lot of time and energy studying the demand side of the equation. Supply dynamics often get short shrift. In this report, we analyze the supply of labor, the supply of fixed capacity, and the supply of inventory. Understanding the supply side can also tell us something about where inflation is headed.
Key Points: There were more than a few landmines in the consumer sector during Q1 earnings season, and lately, it’s been bellwether stocks like Starbucks, McDonald’s, Nike, and Lululemon that’ve been sounding the alarm. The aim of this report is to understand whether Q1 results signal a softening consumer, or if the issues are idiosyncratic in nature.
Key Points: The gig economy remains a mystery. It’s estimated that 25% of the population participates in informal work, but their efforts are not captured in official statistics. If they were, employment would be higher by as much as 4%. The gig economy has spawned some interesting business models like Uber and DoorDash. This report offers a perspective on those platforms and compares them to other delivery-based models, including Dominos, Amazon and UPS.
Key Points: There’s been a wide divergence of returns among consumer stocks over the past year. In the process, we’ve seen valuations converge. In this report, we dig into valuation – our aim is to determine whether it should play a central role or a supporting role in the stock selection process. We also seek to identify opportunities that boast both solid fundamentals and attractive valuation.
Key Points: Brands are supposed to be more valuable than resellers, but Costco’s stock has outperformed Pepsi, Dick’s has fared a lot better than Nike, and Ulta has bested Estee Lauder. This report analyzes dynamics in the footwear, beauty and home furnishings industries to understand what, if anything, is afoot.
Key Points: Another earnings season is winding down. As a group, the 140 consumer stocks we track grew Q4 revenues by +4%. Profits grew marginally but were +6% excluding the volatile auto sector. Normalization was evident in the results. Leisure stocks are still in recovery mode. Durables are battling a post-COVID hangover, and both autos and staples are struggling to get price and volume back into balance. This report is a consumer 10-K of sorts
We’ve been expecting the consumer to hit a soft patch, and recent employment data have made that outcome more likely. Fiscal stimulus and rate cuts will help stave off a bigger issue, but portfolios might still need to be reoriented. We think rate-sensitive names will continue to work — we’re especially fond of housing-related stocks. And, we built three frameworks to identify stocks that can bridge a gap. They identify issues with (i) pricing power, (ii) asset-light models, and (iii) good shock absorbers.
This webinar details our outlook for the consumer. H2 ’25 will be turbulent due to a lopsided employment picture, incomes that are not as strong as they appear, an immigration headwind, collateral damage from student debt repayment, and tariffs. We expect the consumer to recover in early ’26 due to stimulus, but investors might want to be prepared for a choppy ride. We recommend finding stocks with pricing power and bulletproof business models. We introduce a couple of frameworks to help chart the course.
There’s a lot going on in consumer land, and this webinar measures the headwinds and tailwinds facing the consumer in 2025 and 2026. Late last year we grew concerned that the consumer was off kilter — employment and spending trends were unbalanced, and we were concerned that policy would dampen spending growth. Now that fiscal stimulus is in the works, our outlook has turned more neutral. There’s lots of math in this presentation, especially as it pertains to policy — immigration, tariffs, and fiscal stimulus. …
We’ve been cautious on the consumer for the past six months. It’s not just about tariffs. Employment growth is lopsided, PCE growth has been of low quality, immigration will soon begin to weigh on aggregate demand, the credit impulse is muted, the “wealth effect” is reversing, and real wage growth is already slowing. Tariffs are a headwind, but they don’t anchor our view. This 30-minute webinar walks through a ton of useful data.
We hosted a timely webinar that outlined a few tail risks. Employment growth is being driven by acyclical sectors like government and health care. Both of these are under a microscope. Job gains are heavily skewed to large firms with over 500 employees. That adds risk to the equation. Immigrants have also been driving the train, but for how long? Tail risk is also discernible within PCE. Obscure categories are growing twice as fast as “bankable” categories. Have a listen!
Hal Lawton joins a growing list of CEOs that’ve graced us with their presence. He shared key insights on our podcast. We talked about how a tight housing market pushed Millennials into TSCO’s catchment area. We talked about TSCO’s 7% market share, and the fact that outsized comps were driven by transactions, not ticket. TSCO has no direct peer — that means it doesn’t have to share its slice of the market with “like” competitors or fall prey to their mistakes. Give a listen!